‘Cap and Trade’ fails for lack of incentives

New research suggests cap and trade programs do not provide sufficient incentives for innovation

Cap and trade programs to reduce emissions do not inherently provide incentives to induce the private sector to develop innovative technologies to address climate change, according to a new study in the journal Proceedings of the National Academy of Sciences.

In fact, said author Margaret Taylor, a researcher at Lawrence Berkeley National Laboratory (Berkeley Lab) who conducted the study while an assistant professor at the University of California, Berkeley’s Goldman School of Public Policy, the success of some cap and trade programs in achieving predetermined pollution reduction targets at low cost seems to have reduced incentives for research and development that could help develop more appropriate pollution control targets. Taylor is a scientist in the Environmental Energy Technologies Division of Berkeley Lab.

“Policymakers rarely see with perfect foresight what the appropriate emissions targets are to protect the public health and environment—the history is that these targets usually need to get stricter,” said Taylor. “Yet policymakers also seldom set targets they don’t have evidence that industry can meet. This is where R&D that can lead to the development of innovative technologies over the longer term is essential.”

In the study, Taylor explored the relationship between innovation and cap and trade programs (CTPs). She used empirical data from the world’s two most successful CTPs, the U.S. national market for sulfur dioxide (SO2) control and the northeast and mid-Atlantic states’ market for nitrogen oxide (NOx) control. (Respectively, Title IV of the 1990 Clean Air Act and the Ozone Transport Commission/NOx Budget Program.)

Taylor’s research shows that before trading began for these CTPs, analysts overestimated how difficult it would be for emissions sources to achieve targets, in a pattern frequently observed in environmental health, safety, and energy efficiency regulation, including all of the world’s CTPs. This was seen in overestimates of the value of allowances, which are permits to release a certain volume of emissions under a CTP. If an entity can reduce emissions cheaply, they can either sell these allowances for whatever price they can get on the market or they can bank these allowances to meet later emissions restrictions.

The cap-and-trade programs Taylor studied exhibited lower-than-expected allowance prices, in part because program participants adopted an unexpected range of approaches for reducing emissions sources in the lead-up to trading. A large bank of allowances grew in response, particularly in the SO2 program, signaling that allowance prices would remain relaxed for many years.

But this low-price message did not cause the policy targets in the CTPs to change, despite evidence that it would not only be cheaper than expected to meet these targets, but it would also be more important to public health to tighten the targets, based on scientific advances. The lower-than-expected price signal did cause emissions sources to reassess their clean technology investments, however, and led to significant cancellations, Taylor reported.

Meanwhile, the low price also signaled to innovators working to develop clean technologies – which are often distinct from the emissions sources that hold allowances – that potential returns to their research and development programs, which generally have uncertain and longer-term payoffs, would be lower than expected.

This effect also helps explain the study’s finding that patenting activity, the dominant indicator of commercially-oriented research and development, peaked before these CTPs were passed and then dropped once allowance markets began operating, reaching low levels not seen since national SO2 and NOx regulation began in 1970.

“There are usually relatively cheap and easy things to do at the start of any new environmental policy program,” said Taylor, who specializes in policy analysis, environmental and energy policy, and innovation. “But if doing these things has the tradeoff of dampening the incentives for longer-term innovation, there can be a real problem, particularly when dramatic levels of technological change are needed, such as in the case of stabilizing the global climate.”

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Lawrence Berkeley National Laboratory addresses the world’s most urgent scientific challenges by advancing sustainable energy, protecting human health, creating new materials, and revealing the origin and fate of the universe. Founded in 1931, Berkeley Lab’s scientific expertise has been recognized with 13 Nobel prizes. The University of California manages Berkeley Lab for the U.S. Department of Energy’s Office of Science. For more, visit www.lbl.gov.

So the message is:
1. Don’t underestimate the ability of free enterprise to innovate and to comply with policy requirements at low cost, even if they complain bitterly ahead of compliance.
2. Innovating to reduce carbon emissions will not be as expensive as many people expect and therefore will have minimal impact on the economy.

So now we have evidence that all that handwringing you guys were doing is not “worse than we thought”. No surprises there for me.

And what is the scientific evidence that there is a need for a CO2 ‘Cap and Trade’ boondoggle?

It seems to be a nice little earner for bankers and politicians who run the scheme. But the costs get passed onto the consumers who are then in ‘energy poverty’ – all very Malthusian after all the people in energy poverty have a very low QALYS score; so probably it is better for everyone if they succumbed and ceased being a drain on the politicians’ budgets.

lack of incentives = lack of tax dollars to dump down a blackhole with no tangible benefit to society.

Support thorium nuclear instead at least it has the benefit of producing a usable energy source.

I just ran across this comment which explains a lot of the mindset of these supermarket predators.

I had the opportunity a few days ago of talking to a bright young anti-nuclear activist about the way Fukushima has helped the anti-nuclear cause….

He said that the ideology of sustainability and anti-nuclearism was so important for the future of humanity that facts should be of no concern. Moreover: if the invention of fake information (i.e. lies) about nuclear energy could bring closer the day of elimination of nuclear power from the earth, then that meant that producing and spreading fake information should (and indeed was) a top priority of all anti-nuclear groups.

So then I asked him why he thought that it was moral and defensible to lie to people. He said that people in general cannot and do not base their views and opinions on facts, so the value of facts versus fiction was relative. In order to bring about the disired outcome (i.e. a nuclear free world) fiction could be (and in fact was, in his opinion) a much better way to do it then facts.

Finally, I asked him why he thought nuclear power should be eliminated even after he told me that he agreed that nuclear power was good for the economy. His reply was simply that an additional goal of the antinuclear movement (as far as he was concerned) was in fact the reduction of economic activity, since according to him, the greatest cause of ecological damage was increased economic activity.

So in his mind, the fact that nuclear power was a boon for the economy was all the more reason to try to eliminate it. In closing, I told him that a reduction in economic activity would also reduce his own prospects for a high quality of life and prosperity. But he didn’t agree with me. He said that further economic expansion was of no use to him, because he believed in living a simple life…..http://atomicinsights.com/2012/03/conversation-with-an-anti-society-antinuclear-activist.html

I wonder how he is going to like wading through thigh deep snow to the wood pile (If he is lucky enough to have wood) when the climate takes a down turn in temperatures. Try cutting wood without a chainsaw to get a real appreciation for civilization. BTDT

Considering that Cap and Trade was a brainstorm designed by one very specific company in order to profit that company handsomely, it is no wonder that it doesn’t help things in the generic sense.

Cap and Trade was a brainchild of Enron. Enron was going to capitalize on the “green” movement and the greenies bit hook, line and sinker. Trouble is, Enron evaporated but the Cap and Trade nonsense lived on. Enron just wasn’t there to shepherd the market they way they had planned to and so it went away. Most of the greenies either didn’t know about Enron’s plans or didn’t want to admit to being in cahoots with Enron. So … here we are.

I’ve always said that ANY Cap and Trade program was simply a money making scam. If a Substance (like sulfur dioxide, mercury, whatever) is hazardous, then there should be a set price on it’s release. None of this trading of ‘indulgences’. When you have to pay for each ton released, then you have a continuing incentive to improve efficiency.

The important thing then becomes having those who determine the price do so in respect to the true level of danger and the technological reality of how hard it is to reduce release levels. Otherwise you end up with something like the current EPA’s obsessive rulings on CO2 and Mercury.

15 March: Tennessean: TN House passes resolution condemning Agenda 21
The state House of Representatives voted 72-23 in favor of House Joint Resolution 587, which denounces the non-binding Agenda 21 plan adopted by a United Nations environmental conference two decades ago…
Little known even in environmental and planning circles until recently, Agenda 21 has grabbed the attention of conservative groups, who say the document calls on national and local governments to pursue environmental goals by limiting property rights and freedom..
Two other states, Georgia and New Hampshire, have considered anti-Agenda 21 measures this year…http://www.tennessean.com/article/20120315/NEWS/303150098/TN-House-passes-resolution-condemning-Agenda-21

By the time a Cap & Trade program for a particular pollutant gets enacted, the technology has already advanced making further research and development high cost. CFC’s didn’t get regulated until DuPont had HFA’s and other substitutes. The Montreal Protocol was after the fact. Technology will advance ahead of implementation, because the lag in implementation is in the rule making process.

Those in love with governmental regulation fail again and again as it is usually cheaper to implement “best practice” rather than governmental cattle prodding tactics induced behavior changes. Rules by governmental agencies make most processes less fluid and more static. Our tax code is a living example of rules which are no longer relevant (corn subsidy), and riddled with unintended consequences (more costly food for developing nations).

Taxing the carbon cycle is equally futile and misaligned not only because there is fundamental deficits in understanding what is “natural”, but lacks a basic understanding what is possible and impact full. Rushing to regulate when fundamental understanding is lacking, encourages disastrous outcomes and social messes.

Governments of all sizes try to equate the agreed upon rules cops on the beat enforce with regulating vast industries, weather and climate. This simplistic concept speaks to how little the people in government, especially the people who do the implementation of poorly understood and thought out regulations, end up making the rules as they go. The rule-making process is usually short on facts, loaded with optimistic projections, constrained by a deadline, and almost always has the wrong participants; i.e., missing the contrary perspective.

Our current EPA agenda with the Endangerment Finding is a quintessential rule-making agency of mediocre regulators adept at political infighting.

Our current Department of Energy funding of solar and wind alternative projects is a representative of the urgency to gore the oil/coal ox. The agenda is no longer to make the USA energy secure, rather, reaching for the Holy Grail of energy sustainability, as if there were such a thing. Funny how costs are not factored into the equation. Artificial subsidies instead of research and innovation.

Predicable outcomes all the way around, almost all government agencies are off the rails. One simple solution, made all laws with non-renewable sunset provisions. If a deadline is staring you in your face, you will have to make new laws and regulations contemporary and not try to bend one agency to do new tasks (NASA to be a climate agency vs NOAA), which inevitably creates duplication and…. government waste. Surprise!

This is most interesting but in effect quite predictable. The private sector is only interested in maximizing return to investors. This goes for producing industry and for innovation industry. The only way one can achieve the type of results desired is through more costly means with few if any escape or delay clauses. That is somewhat draconian and may not be politically acceptable.

Well, I had made a post here stating my opinion of Cap and Trade, but it didn’t come up or even say it’s awaiting moderation, so I assume it wondered off and got lost. Oh well.

Basically I said that my opinion was that C&T is a scam, and that if a substance was really a danger to the environment then the proper response was a set price (per ton or whatever). This encourages continuous research into mitigation technology, and provides an incentive for all produces to use the most economical response available. And it allows the accepted level of production to be modified over time by adjusting the price.

All of this crap based on the false assumption that CO2 is causing catastrophic global warming!

I disagree. All of this crap is based on the assumption that there is a FORTUNE to be made by both private industry and politicians if the public can be convinced that CO2 is causing catastrophic global warming.

Keep in mind that one of the primary sources of wealth for members of Congress has been insider trading. They work on regulatory bills and trade the stocks of companies who will be impacted by their regulation and they make a fortune (see a book called “Throw Them All Out”). If you regulate energy, your regulations impact the entire economy. You have a much wider array of ways to make money hand over fist through regulations. For example, you are working on a regulation you know will have a major negative impact on airlines, so just before news about the regulation is released, you sell a bunch of airline stock short. The stock goes down after release of the information and you make money on your short sale. Now you cover the short at a profit and go long because you are about to announce an amendment to the legislation that will ease the burden on the airlines and their stock will rise. You make the trade, make the announcement, and profit handsomely again as the stocks in airlines now rise.

Not only that, but now you have some huge deep-pocket campaign donors standing to make a fortune on these regulations as well. So they are supporting the legislation AND dumping tons of cash into your campaign fund (which you are allowed to keep when you retire from Congress).

So the DOE wonders why the Enron strategy has not worked to produce a “market based solution” to what? A fanciful belief that 97% of the scientists polled are right about the earth warming in the last 100 years is due to an assumed after the poll correlation to CO2. The DOE and the EPA do the bidding of Mr. Green. Mr. Green’s interests are not the interests of the general public.

“Policymakers rarely see with perfect foresight what the appropriate emissions targets are to protect the public health and environment—the history is that these targets usually need to get stricter,” said Taylor.

Appropriate for what? What history? Why stricter? Is the mere existence of the control a problem?

Cap ‘n’ trade proponents have always failed to look at other incentives to reduce the carbon emissions, such as the high oil price.
They also fail to appreciate that there is no close substitute for high carbon energy. If there is no close substitute then carbon credits become an additional cost.
They also fail to appreciate how easy it is to switch some jobs (especially manufacturing) to low cost areas. If additional costs are imposed in some areas (California, Australia, EU), then some jobs will be switched to areas where no costs exist (China).

18 March: Jakarta Globe: Grace Chua: Straits Times: WWF, Singapore Disagree Over Carbon Emissions Count
Your carbon emissions are still too high but, hey, Singapore is doing a great job when it comes to energy efficiency and others can learn from you.
That seems to be the “yes, but…” response from the World Wide Fund for Nature (WWF), in the wake of a rebuttal by Singapore’s National Climate Change Secretariat (NCCS) to scathing remarks about the Republic’s greening efforts.
Earlier this month, media reports said that the WWF’s Living Planet Report (2010) had named Singapore as having the highest per capita carbon footprint in the Asia-Pacific region…
Last week, the NCCS — which comes under the Prime Minister’s Office — responded sharply, saying the comment “seriously misrepresents the situation.”
The key bone of contention is the methodology. The WWF counts emissions from goods that a country imports as attributed to that country.
But in the United Nations’ methodology, adopted by Singapore, those emissions are attributed to the country producing those goods…
National University of Singapore geography associate professor Victor Savage, who studies sustainable development, agreed with the NCCS’ point about “per capita” distortions.
He said using per capita emissions ratings lets large carbon emitters like China, Germany and Australia off the hook. They may not have high per capita emissions, but they are large overall emitters…
In February, a University of British Columbia study ranked the Republic bottom of 150 countries in its “ecological deficits,” meaning it used far more of the earth’s resources than it could supply.
In response to that study, the Ministry of the Environment and Water Resources said Singapore should be compared with other city-states, not larger nations with more natural resources.
The Asian Green City Index by technology firm Siemens last year rated Singapore tops in its management of waste and water resources, and gave it high marks in sanitation and environmental governance.http://www.thejakartaglobe.com/international/wwf-singapore-disagree-over-carbon-emissions-count/505564

LazyTeenager says:
March 18, 2012 at 2:58 pm
“So the message is:
1. Don’t underestimate the ability of free enterprise to innovate and to comply with policy requirements at low cost, even if they complain bitterly ahead of compliance.
2. Innovating to reduce carbon emissions will not be as expensive as many people expect and therefore will have minimal impact on the economy.

So now we have evidence that all that handwringing you guys were doing is not “worse than we thought”. No surprises there for me.”

LazyTeenager, here in Europe we DO have Cap&Trade; and in Germany, skyrocketing electricity prices due to renewables. Now how DO companies adapt to such a regime? As you have noticed they adapt quickly. One such adaptation is currently happening in Duisburg, where Thyssen Krupp sells their steel mill to the Finnish Outokumpu who will shut it down, dismantle it and move it somewhere else. ThyssenKrupp plans to get out of steel completely.

Of course, this frees up some carbon credits for the remaining industry and also helps to reduce electricity usage, as unemployed steelworkers only need a little electricity to run their playstations.

THAT’s “the ability of free enterprise to innovate and to comply with policy requirements at low cost” for you.

“Innovating to reduce carbon emissions will not be as expensive as many people expect and therefore will have minimal impact on the economy.”

Clearly a person who is logically irredeemable with nothing that he/she will not rationalize in support of the CO2 religious cult. Oh the irony of alarmist handwringing and bedwetting over forcings and tipping points while completely disregarding others …

Scenario A :: theoretical environmental forcings conspiring to tip the climate into a catastrophic condition. This is what the climate cult chooses to fret about.

Scenario B :: a gravely teetering economy submerged in hundreds of TRILLIONS of dollars red ink debt and future liabilities, ongoing job destruction, outsourcing, unemployment, rising fuel prices, extravagant welfare spending and not-even-yet implemented obamacare. THIS is cavalierly targeted for a carbon tax that will affect every remaining product and job that exists. This is what the climate cult chooses to rationalize, likely as an acceptable casualty of war.

The complete and utter destruction of the economy and America itself will be the only possible result if we keep voting for people that are representative of this commenter, and there are far too many still in place in our District Of Criminals. They are like drunk drivers that drink more and more, then get in the car and drive faster and faster. Nothing will ever penetrate their inebriated ‘thought process’. You must take the car keys away. Vote them out next chance you get!

An artificial market manipulation will always yield poorer results than the self-regulatory market forces will bring to bear. But that’s too damn hard to comprehend for those who don’t participate in a market.

18 March: UK Register: Microsoft signs up Aus eco geeks
Australian cloud computing eco-warrior Carbon Systems has scored its most significant deal to date with a global Microsoft agreement.
Carbon Systems’ Australian developed cloud app, Enterprise Sustainability Platform (ESP), will be implemented across Microsoft’s 600 global facilities across 110 countries…
The privately owned and funded Australian company with digs in London, New York and Sydney, started in 2004 developing its core technology for electricity smart meters readings.
The company has also been supported by business incubator ATP Innovations and now has over 110 clients globally, 25 of which have stemmed from the sustainability software market which the company entered three years ago…http://www.theregister.co.uk/2012/03/18/carbonsystems_wins_microsoft_deal/

Bastiat long ago drew attention to the foolishness of imagining that any cadre of ‘crats, no matter how numerous, could possibly monitor and allocate the resources as effectively as the private parties directly concerned. The attempt to force unreal prices onto marketplaces is the worst of such interventions. The consequences are immediate, drastic, and contrary to those desired.

The Invisible Hand has brass knucks, and will inflict mortal uppercuts and right crosses to those who try to substitute their own clumsy fiddling.

Cap and trade programs to reduce emissions do not inherently provide incentives to induce the private sector to develop innovative technologies to address climate change, according to a new study in the journal Proceedings of the National Academy of Sciences.

Not exactly true….as an engineering consultant who tried to help some of these idiot carbon-credit-aggregator companies in hey-dey of the Kyoto Clean Development Mechanism, I came up with plenty of innovations that would have saved money for the clients and greatly improved their odds of making obscene profits from these projects. Mostly these were manure biogas projects in Asia and Latin America. Cool stuff, we have pig farms in the Philippines that produced 100% of their electricity from the pig manure fumes!

However, I was dealing with bean-counters and university washouts who had no idea of industrial equipment, elementary physics, chemistry, biology etc. Oh well, it was fun while it lasted!

18 March: EarthTechling: Kristy Hessman: Carbon-Cutting Kids Cop Cool Cash
Helping reduce carbon emissions is not only good for the environment, it can also have financial advantages. That’s what the schools that participated in Make an Impact: Change Our 2morrow (CO2) discovered. The month-long energy conservation challenge, put on by Alcoa Foundation and the Center for Climate and Energy Solutions (C2ES), ended with six of the eight schools winning grants totaling $9,000.
The Gilbert School in Winsted, Conn., won the grand prize. The school completed a whopping 793 percent of its pledge list, according to the competition’s leader board. The school was rewarded with a $5,000 grant for engaging the most students, teachers, families and community members…
Regional runner-up schools included…ETChttp://www.earthtechling.com/2012/03/carbon-cutting-kids-cop-cool-cash/

So the message is:
1. Don’t underestimate the ability of free enterprise to innovate and to comply with policy requirements at low cost, even if they complain bitterly ahead of compliance.
2. Innovating to reduce carbon emissions will not be as expensive as many people expect and therefore will have minimal impact on the economy.

So now we have evidence that all that handwringing you guys were doing is not “worse than we thought”. No surprises there for me.
_______________________________________
You forget there is a cost associated with all those regulations. For one thing you have to hire someone to handle all the paperwork and someone else to handle taking samples and sending them out for testing BTDT. That cost never ever goes away.

The cost of all this gets then passed onto the consumer because the company IS going to make a profit or close its doors. For example it used to be that diesel fuel was a heck of a lot cheap than gasoline. Now, in my area it is a good $0.38 more expensive. That is a 10% additional “tax” at the pump we as consumers are not even aware of.

Second thanks to all the regulations since the 1970’s, manufacturing jobs have gone from 24% of the job force to less than 9% the last time I looked and that was before the recession.

Free Trade Agreements combined with expensive energy and stringent regulations means business has fled the USA or gone under. And that means NO JOBS or rotten paying jobs as burger flippers and shop keepers. See: Largest American EmployersU.S. unemployment is ~ 23%

Nation of Shopkeepers
the United States, however, continues its free-trade-induced trend towards “a nation of shopkeepers”(courtesy of NAFTA, the WTO, PNTR for China, and the newest round of free trade agreements with Jordan, Chile, Singapore, Morocco, Australia, the Andean countries, and Central America), it will continue to lose the advantages – similar to those of the rising British Empire – which had put it on top of the world in the 20th century. The Bush Administration, not to mention most of the Congress, has yet to grasp what is happening economically, even as it tries to defuse some of the political consequences of free trade agreements.

18 March: GreenProphet: Miriam Kress: Christians Take on Carbon Fast for Lent
Among other eco-conscious Church leaders, the Archbishop of York has gone vegan and fair-trade for the duration of Lent…
And recently, churches are encouraging their congregations to take on an innovative Lenten sacrifice. It’s called the Carbon Fast.
Congregants are encouraged to take simple, carbon-reducing steps like eating less meat. (Our vegewarian recipes, like this risotto, give some good ideas for meatless meals.) Or packing groceries in reuseable bags instead of using that eco-menace, plastic bags. Walking, bicycling, or riding a bus rather than driving. You get the idea. These churches provide weekly calendars with suggestions and tips for carbon reduction, each paired to a spiritual goal. An intriguing example is, “Remember your baptism and the power of water. Conserve water: leave a bucket near the kitchen sink and water your plants with grey water.”…
This year communities in Canada, the Netherlands, India, Hong Kong, Australia, and Brazil are observing Carbon Fast.
Fully aware that individual acts must eventually lead to popular support for green legislation, Tearfund still calculates that the Carbon Fast’s actions, taken over the whole year, might save more than 7 tons of CO2 per person. This article in The Center for American Progress reports that 6000 people committed to last year’s Carbon Fast. With promotion through social media plus adaily carbon-lowering tip in congregant’s email inboxes, there should be even more this year. That sounds powerful.
Tomorrow’s interfaith convention on climate change and sustainable energy in Jerusalem promises to bring forward the power of religion in effecting eco-consciousness…http://www.greenprophet.com/2012/03/christians-carbon-fast-for-lent/

And an endless stream of non-jobs from AGW. People paid to write proposals to ‘solve it’; others paid to criticise the proposals as inadequate; yet more paid to criticise the critics as underestimating the inadequacies….

The 21st Century will see the undoing of centuries of upward civilisation if we carry on like this.

The whole theory presupposes that there is a viable alternative form of energy and that its just a matter of developing the technology to implement it. Hobbling competition may make that development more likely.

However, when the same government hobbles or even bans the only promising alternatives which are just waiting for development, supposing that something else is miraculously going to appear out of thin air, or maybe that a Vulcan spaceship is going to drop by and give us the secret of unlimited energy, then the results are predictable.

The so-called renewables (so called, because NOTHING is renewable, entropy will get it all in the end) such as wind and solar are non-starters for anyone that cares to invest a few moments of real thought.

The real alternatives, gas and oil from fracking, oil from tar sands, hydro electricity and, of course, nuclear energy are all forbidden.

The only thing that cap and trade in combination with these prohibitions will deliver is a broken energy industry, unreliable power, economic collapse, misery despair, famine, plague and death.

Greg Smith said the Wall Street giant, which paid huge penalties for double-dealing with investors in mortgage securities during the financial crisis, had dumped its old culture of honestly helping its customers make money.

Today, instead, customers are called “muppets” by top executives and staff talk about “ripping their clients off”, Mr Smith wrote in an opinion piece.
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Is treason to strong a word ?

The delusion is crashing down. If you believe in the problem to begin with, where is the solution? Every green fantasy has been pursued without any tangible result other than the waste of resources, capital and human effort. Most people would support research into a new energy source. Where is it? So far it has been dead ends and con jobs. Most of the ideas are so silly you would have to be very stoned to even consider them. Thorium is the flavour of the month but it has serious problems that may never be solved. More research, maybe, but don’t count any chickens.

The enviro movement won the day but they are lost now. None of their plans actually work. The hard part now is admitting the failure. That may take some time. The only thing that would meet their goals is a massive population cull. That one is a non starter I hope. Way too much work.

Bastiat long ago drew attention to the foolishness of imagining that any cadre of ‘crats, no matter how numerous, could possibly monitor and allocate the resources as effectively as the private parties directly concerned. The attempt to force unreal prices onto marketplaces is the worst of such interventions. The consequences are immediate, drastic, and contrary to those desired.

The Invisible Hand has brass knucks, and will inflict mortal uppercuts and right crosses to those who try to substitute their own clumsy fiddling.
_______________________________________
The whole idea of bureaucratic fiddling and regulations is to divert money from the producing classes to the pockets of the a href=”http://joannenova.com.au/2012/03/climate-coup-the-politics/”>Regulating Classes.

As far as the Regulating Classes are concerned the producing classes aka “the average joe” are sheep to be sheared and if recent events are any indication they could care less if a few million of us die because of there economic manipulations.How Goldman Sachs Created the Food Crisis

For the first time in history, over 1.02 billion people do not have enough to eat. That’s one sixth of humanity – more than the population of the United States, Canada and the European Union combined. ~ Source: FAO Hunger Report 2008

And we turn corn into ethanol to burn in our cars so Monsanto, Cargill, Archer Daniels Midland, could make record breaking profits.

…… Cool stuff, we have pig farms in the Philippines that produced 100% of their electricity from the pig manure fumes!

However, I was dealing with bean-counters and university washouts who had no idea of industrial equipment, elementary physics, chemistry, biology etc. Oh well, it was fun while it lasted!
________________________________
Neat!
I knew a farmer who ran his Pick-up on Chicken Manure…. I keep looking at that manure pile I have sitting off in the woods.

The bean-counters are very very frustrating to work with. In desperation I took accounting courses so I had a chance of arguing successfully with them at least part of the time.

The only innovation is to learn how to trade a new derivative, CO2 for profit. Better to sell the business to China/India/Brazil/Russia and trade carefully with the profit. No running costs, no regulation red tape, no union troubles or delivery delays etc etc etc. Just you the trading platform and the tax office.

the australian gillard gov,t is a big fan of the carbon tax ,from the 1st of july we are going to be taxed at $23 per ton on any company generating over 50000 tons this tax is going to destroy australia ,please keep a eye on us we need tour help

“Honourable senators, I rise to address Bill S-205, an Act to amend the Income Tax Act. If passed, this amendment would give tax credits to Canadians who invest in so-called carbon offsets. While I have no objection to citizens spending their own money in any way they choose, I do not support the government’s giving tax credits for carbon offsets.”

The 21st Century will see the undoing of centuries of upward civilisation if we carry on like this.
_______________________________________________
That is the game plan it would seem.

..Would we not shatter it to bits, and then
Remould it nearer to the heart’s desire!

In the Fabian Window just installed in the London School of Economics, the founder of both, Sidney Webb, along with George Bernard Shaw is depicted smashing the world to bits. Given what George Bernard Shaw has written about a world ” Remould nearer to their heart’s desire! I am not at all interested in living in it!

With the number of world leaders, CEO, Bankers … Who have graduated from that school or give seminars there I think it is idiotic to ignore the school’s influence especially when the free FABIAN SOCIETY PHAMPHLET [url=http://www.aeinstein.org/organizations/org/FDTD.pdf] From Dictator to Democracy[/url] was seen in Egypt

…As journalists have sought to untangle the disparate threads that unite these uprisings, one of the most interesting revelations has been a common reference to a dusty — but still relevant — book, “From Dictatorship to Democracy.”

Don’t forget that the present administration uses the EO (executive order ) to pass anything they desire ,so a cap and trade or something similar could be on the way.
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They will wait until after the elections and pass it during the lame duck session just like they did with the very unpoplular “Food Safety Modernization Act” They hope we will forget about it when they come up for re-election.

Once passed you do not get the *&^$ bills repealed they just get worse.

Craig Moore says: Are you suggesting that Mr. Swift would have approved of climate Lilliputians being roasted on kabob sticks as a means of carbon reduction ?
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Janice says: What a horrible idea, Mr. Moore! The very idea of putting them on kabob sticks! Much better as a nice stew with taters. They are much too tough to make kabobs of them.
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I LOVE vegetarians, YUM! I am eating some cooked medium rare right now.

This article is quite interesting. That cap-and-trade was used in the 90s and 2000s in the way that Professor Taylor describes ignores the fact that the causes of “acid rain” and the acidity of lakes and rivers in New York and most of the Northeast was not utility power plant emissions, nor was the phenomenon as harmful as EPA and the politicians found it to be. The program “60 Minutes” debunked the need for an acid rain cap-and-trade scheme long ago, and there are other scientists who have debunked the myth as well. See the following:

“A fanciful belief that 97% of the scientists polled are right about the earth warming in the last 100 years is due to an assumed after the poll correlation to CO2.”

I really wish people would start saying that 77 “scientists” out of 100s of thousands think CO2 is a poison,and that we are all gonna roast.
And you can bet your bottom penny that the ONLY reason that gubermints go along with these schemes is money in their pockets,farck the rest of us.

morgo….I always keep an eye on OZ ever since I fell in love with it (and of course the shielas!!) way back in ’82.Unfortunately it appears it is no longer the free loving,leftard hating,hard working country I found.

The incredible idiocy of “cap and trade” isn’t that it hasn’t worked as planned, but that it accomplsihes nothing that would haven’t have been accomplished anyway. For any industry for which energy is a significant operating expense, the pressure to reduce energy costs by any means possible is relentless. Trucking, mining, shipping, pulp and paper, smelting, pick one, these are all industries working hard to reduce their energy costs, period. Cap and trade provides nothing more than a tax on their proftits that would otherwise have been invested in things like…reducing energy costs.

The secondary effect of “cap and trade” is to push companies away from traditional energy sources toward “green” energy sources like windmills. So now the economy gets hit with a double whammy. Companies spending time and resources to switch energy supply to idiotic things like wind farms instead of spending those resources on energy efficiency, and tax dollars being used to subsidize the wind farms in order to make the competitive so that industry will have something to switch to that isn’t more expensive than just paying the carbon tax in the first place.

Confronted with the fact that industry is highly motivated to reduce energy consumption in the first place, the idiots instead hobble their ability to do so, pour tax dollers into alternative energy which simply winds up subsidizing industry’s options instead of encouraging energy efficiency, and then it takes some geniuses with PhD’s to figure out that the while thing is not working as planned.

LazyTeenager;
So now we have evidence that all that handwringing you guys were doing is not “worse than we thought”. No surprises there for me.>>>

No what we have is evidence that industry bean counters have been able to outsmart and circumvent government bean counters.

If you think that there is no impact to the cost of food on your plate and the clothes that you wear, and putting a roof over your head, then you are either have an incredibly poor grasp of the economics at play, or you still live off your mommey and your daddy and hence haven’t had to think about these things.

Folks, this is the key….nearly every industrial waste product has a value to someone. The gypsum used in the wallboard in our homes originally came from the wet sulfur scrubbers of coal-fired utilities. Coal ash is so valuable that there is a trade group dedicated to developing new markets, see http://www.acaa-usa.org/

Eventually, new uses will be found for the excess carbon dioxide generated from fossil fuel plants. The carbon dioxide that sparkles your soft drink originally came from an ethanol fermenter & was purified (I’m a former BOC Gases consultant & worked on this stuff, cool as hell if you like chemical engineering!). Carbon dioxide is being widely used to replace solvents, mineral acids and other nasty stuff.

It’s just a matter of time, let the private markets figure it out. If someone can crack the algae puzzle (how to grow the stuff efficiently), there will be a run on fossil carbon dioxide. I’m right in the thick of this through the University of Illinois, it is fun to watch!

Of course, if we are TOO good at recovering all this fossil carbon dioxide, I’m worried about a cooling planet thanks to Svensmark’s theories! (looking over my shoulder for an incoming Lief!)

davidmhoffer says:
March 18, 2012 at 8:01 pm
BTW LazyTeenager, do you know what a 2% drop in standard of living in the western world translates into in the third world?

Death.

Any chance you can do some hand wringing for the people who are actually starving to death because we’re burning the food for carbon credits?

David – you won’t see any hand-wringing as that is what they want for the whole world not just the third world. The entire thrust of the ‘Green Agenda’ aka Agenda 21 aka Rio Declaration aka Club of Rome is that humanity is the problem and must be reduced. For some reason they always seem to think that they and their families will be immune from their cull.

Craig Moore says:
March 18, 2012 at 7:53 pm>
Gail Combs says:
March 18, 2012 at 7:06 pm
I LOVE vegetarians, YUM! I am eating some cooked medium rare right now. >>
The game wardens will be paying you a visit if you poach them. At least that’s what I see on the Nat Geo channel. Try some other cooking method.>>>

There’s nothing wrong with Gail’s cooking method provided that one keeps in mind that many game wardens are vegetarians. Clearly not all are vegetarian, but variety is good for one’s diet.

I wonder how he is going to like wading through thigh deep snow to the wood pile (If he is lucky enough to have wood) when the climate takes a down turn in temperatures. Try cutting wood without a chainsaw to get a real appreciation for civilization. BTDT

Wood would become a valuable commodity, as it was prior to the industrial revolution. Access to woodland, and the right to collect wood would be restricted. Charcoal would once again become an important fuel and the main use of wood, as it was prior to large scale coal mining.

The reality is that most people in places like Europe and Japan would have little or no wood as fuel, or for cooking. If they were lucky they would get to cook their dinner using a dried cow patty.

BTW I’ve seen charcoal being made the traditional way. All the volatile materials from green wood are ‘cooked off’ as smoke and that is an awful lot of smoke.

BTW LazyTeenager, do you know what a 2% drop in standard of living in the western world translates into in the third world?

Look, Lazy Teenager isn’t worth wasting your time acknowledging. That person is the epitome of exactly what is wrong with these people. Everything is ideology with them without a lick of sense. They would “save the planet” to death if they had their way. It is simply brainless following of a cultural fashion. Engaging with that person is a waste of both of your time. You aren’t dealing with a rational person.

18 March: EarthTechling: Kristy Hessman: Carbon-Cutting Kids Cop Cool Cash
Helping reduce carbon emissions is not only good for the environment, it can also have financial advantages. That’s what the schools that participated in Make an Impact: Change Our 2morrow (CO2) discovered. The month-long energy conservation challenge, put on by Alcoa Foundation and the Center for Climate and Energy Solutions (C2ES), ended with six of the eight schools winning grants totaling $9,000.
——————————————————————-
Yes Pat, you nailed it exactly. The whole effort is directed toward political indoctrination and brainwashing. Real innovation and sound technology are not part of the picture.

Lazy teenager says
“Innovating to reduce carbon emissions will not be as expensive as many people expect and therefore will have minimal impact on the economy.”

As others have already indicated there is virtually no viable subsitute for carbon as an energy source, especially for liquid fuels. If Nuclear is ruled out there is no viable replacement for electricity either. It is foolish to claim that technology can pull a rabbit out of a hat.

Anyone who has ever worked in research and brought technology to commercialization in the real world would never make a claim that such a policy will have minimal impact on the economy.

Also keep in mind the great promise of cellulosic ethanol. Economics aside, in spite of massive subsidies and investments the policy has failed to provide any commercial quantities of ethanol to date. Besides, who can afford to pay $ 14/gal like the Navy has been forced to do.
Some of the low carbon proponents have come to realize this and have invented the term “renewable fuel”, (which actualy emits comparable CO2).

The government has been forced to back off the mandated cellulosic ethanol content drastically, yet still plans to fine the blenders for not incorporating nonexistant ethanol.

For anyone who has a fundamental understanding of energy, it is obvious that there is no viable near term subsitute for carbon that will meet our energy needs. In fact there may never be a subsitute in the forms currently pushed by the government.
The government will continue to try to fool the public with scams like electric cars, which have limited application, because a viable battery does not exist that allows vehicle travel a reasonable distance. The public now knows this with their rejection of electric cars in spite if $7,000 credits per car. It is foolish to subsidize a vehicle for which there is no power source, even on the horizon for multiple decades.

No private industry would spend their own $$$ perfecting any device or technology that has an obvious fatal flaw. You work on the weak link before going into commercialization! The technology was pushed to temporarily fool the public into believing there is an alternative (hiding the fact than an electric car is actually a coal burner).

In the UK we have enormous gas and electricity bills, partly because of a government-enforced surcharge (which is then taxed at 20%) to subsidise wind farms and other inefficient alternative energy schemes.

The game wardens will be paying you a visit if you poach them. At least that’s what I see on the Nat Geo channel. Try some other cooking method.
___________________________________
Not a problem. I sell my overstock to a deputy. Besides the police dept. around here is crookeder ‘than a dog’s hind leg

China has suspended the purchase of 10 more Airbus jets, two people familiar with the matter said on Thursday, raising the stakes in a potentially damaging trade row over European Union airline emissions charges.

The move to delay the purchase of extra A330 planes brings to $14 billion the value of European aircraft caught up in tensions over the EU’s Emissions Trading Scheme, which has angered countries including China, India and the United States.

It comes amid urgent efforts to find a solution to the row, which airlines fear could provoke an aviation trade war capable of causing travel disruption and hitting air traffic rights.

Earlier this week, European planemaker Airbus said China had blocked the purchase of 35 long-haul A330s and 10 Airbus A380 superjumbos worth a total of $12 billion.

Airbus did not name the airlines involved, but industry sources said the A380s were earmarked for Hong Kong Airlines, 46-percent owned by HNA Group, the parent of Hainan Airlines.

The row is over a cap-and-trade scheme which could levy charges for carbon emissions for flights in and out of Europe.”

DirkH says:
March 18, 2012 at 4:51 pmhere in Europe we DO have Cap&Trade; and in Germany, skyrocketing electricity prices due to renewables

The Northwest European Benchmark price for a tonne of steam coal has gone from $35 in the year 2000 to $95 in 2010. As a rough approximation every $20 increase in the price of a tonne of coal adds 1 cent to the price of a KWh of electricity. So the price of coal added ~ 3 cents/KWh.
Renewables and carbon taxes probably added some as well making it all particularly painful.

DirkH says:
March 18, 2012 at 4:51 pm
” here in Europe we DO have Cap&Trade; and in Germany, skyrocketing electricity prices due to renewables. Now how DO companies adapt to such a regime? As you have noticed they adapt quickly. One such adaptation is currently happening in Duisburg, where Thyssen Krupp sells their steel mill to the Finnish Outokumpu who will shut it down, dismantle it and move it somewhere else. ThyssenKrupp plans to get out of steel completely.
Of course, this frees up some carbon credits for the remaining industry and also helps to reduce electricity usage, as unemployed steelworkers only need a little electricity to run their playstations.
THAT’s “the ability of free enterprise to innovate and to comply with policy requirements at low cost” for you.”

That’s just a copy of what happened to Redcar,(formerly) the UK’s largest steel mill. It attracted a huge Carbon credit to reduce it’s CO2 output. It was bought by Tata of India (where a well-known railroad engineer has his day-job) who closed Redcar and mades the workforce unemployed. pocketed the huge carbon credit, moved the plant to India where it now produces as much steel as Redcar used to make. They also pocketed a large subsidy for doing so. Now India produces all (and more) CO2 than Redcar ever did!
How does that suit you Lazy teenager?

It should not take an academic study to determine that Cap & Trade programs structured like those for SO2 and NOx would not “induce the private sector to develop innovative technologies”. Anyone remotely familiar with these successful EPA programs could have told you that.

Ms. Taylor appears to lack a fundamental understanding of the original goals of these programs. Specifically that the purpose of the CAIR cap and trading programs was to reduce overall regional SO2 and NOx levels under circumstances where it was recognized that: 1) the goals could be meet using existing technology and, 2) not all utility plants had to be controlled to meet the regional goals.

Since there was no economic need for any NEW “innovative Technologies”, the private sector properly invested in BUILDING and IMPROVING the capabilities of the best technologies commercially available at the time. Specifically the Wet FGD and the SCR. Any needed adjustment to meet the emission goals in these programs is/was taken take of by constructing the next marginal cost unit in the region. No new technology was needed.

Furthermore , I would disagree with Ms. Taylor’s implied proposition that the private sector did not develop innovative technologies to meet these goals. To the contrary there were significant advancements in the performance of the existing technology of the time. And these advancements continue.

I would agree with the statement “the dominate indicator of commercially-oriented research and development peaked before these CTPS were passed”. This always happens once a regulation is passed, simply because the utilities have to shift their R&D resources (both manpower and money) to build pollution equipment that can meet the regulation within tight deadlines. Simply put, key personnel are shifted from the R&D role to a design and construction role. This should not be a suprise; becuase, from a practical standpoint, utilities simply do not have time to do more R&D at that junction… it’s time to deliver usable product.

Once the initial construction phase passes the Utility/Engineering R&D people shift emphasis to “lessons learned” and lowering operating cost.

In my experience, the reduced reliance on “new technolgy” research (with the passage of any regulation) is a sore point to the academic community… because they are never too pleased to find that companies can’t afford to waste time on ideas which are… hmm “academic”. So, I’m entirely not surprised the researchers at Berkeley Lab are appalled at the natural outcome of this economic reality.

I would also disagree with Ms. Taylors observation that cap-and-trade programs “exhibited lower-than-expected allowance prices” that “did not cause the policy targets to change”. Perhaps she is not familiar with the drop in the CAIR Phase 2 emission limits or the more stringent drop in emissions required by the CSAPR rule. Nor does she appear to recognize the periodic tightening of the best available technology standards.

Dear LazyTeenager where you say:
“March 18, 2012 at 2:58 pm
“So the message is:
1. Don’t underestimate the ability of free enterprise to innovate and to comply with policy requirements at low cost, even if they complain bitterly ahead of compliance.
2. Innovating to reduce carbon emissions will not be as expensive as many people expect and therefore will have minimal impact on the economy.”

I’m afraid you may be making the rookie mistake of assuming that market-based allowance prices reflect the total cost a pollution technology. Normally this true only during the first three to five of years of a new regulation – when pollution equipment is scarce and demand for allowance reflects the total cost of controlling an emission.

This ceases to be true once a country’s industry has matured to the point that it has built-up its “fleet” of pollution technology to meet the annual emission “cap”. In a mature market, the allowance prices only reflects the operating cost of the control technology (i.e. reagent cost plus operating O&M). Typically the capital cost is not recovered, it is passed to the consumer as a fixed cost.

To place this in context, the economic decision in a mature market, is wither to operate your pollution equipment or not. When allowances market prices drop below a control technology’s operating cost, the owner simply shuts-down the pollution equipment and buys the allowance instead. This provides companies with the flexibility to provide the consumer with some “cushion” in unusual circumstances (for example, if reagent prices are unusually high or if pollution equipment unexpectedly fails). But the consumer is still “hurt” .. as the “hidden” capital cost cannot be avoided.

With regard to your statement above, I would caution you not to assume than any discussion/examination of “low” allowance prices should lead you to assume “carbon emissions will not be as expensive as many people expect”. Or that you can assume that any discussion of that historical emission allowance prices trends will tell anything about the actual cost of controlling an emission.

kforestcat says:
March 19, 2012 at 6:06 pm
…
With regard to your statement above, I would caution you not to assume than any discussion/examination of “low” allowance prices should lead you to assume “carbon emissions will not be as expensive as many people expect”. Or that you can assume that any discussion of that historical emission allowance prices trends will tell anything about the actual cost of controlling an emission.

Indeed, the whole d*** thing is a version of Bastiat’s ‘Broken window fallacy”. The real costs are the “unseen”, the foregone productive activities the diverted funds would have covered and sustained. The 2-4:1 ratio of lost jobs in the private sector to new “green stimulus jobs” is one example.